One in four deals reworked because dealership online calculators inaccurately quote payment terms, impacting F&I sales penetration & transaction times, according to eLEND Solutions survey, as dealers report sales pullback driven by economic uncertainties
Foothill Ranch, Calif. – January 24th, 2023 – A new snapshot survey of auto dealers, from automotive FinTech innovator eLEND Solutions, confirms that the amount of a monthly vehicle payment is more important to today’s car buyers than the overall vehicle selling price. As the survey reveals, this creates a significant challenge for the nearly 70% of dealers who use online tools to quote monthly payments.
The majority of dealers surveyed report that not only are these payment quotes inaccurate over half of the time but, as a consequence, they are driving rehashes and losses in F&I product sales penetration and increasing F&I time delays – by an additional 15 to 30 minutes say the majority.
Dealers in the online snapshot survey, fielded by eLEND Solutions in December 2022, also report that economic uncertainties are driving a sales pullback, and 80% cite time delay in the F&I office as the greatest obstacle to profits and satisfaction.
“Online calculators are among the biggest of today’s digital retailing traps, offering up monthly payment estimates disconnected from real lender terms and consumer credit profiles that, more often than not, are an illusion, as this survey confirms,” said eLEND Solutions CEO and Founder, Pete MacInnis.
According to the survey, while dealers confirm that payment price is more important than sales price, nearly half acknowledged that calculations from currently available online payment estimators hurt F&I product sales/penetration: 8 in 10 dealers estimate that 60% of their payment calculator quotes are not accurately matched to the final contracted monthly payment amount.
“Affordability is the number one issue for car buyers for 2023 and that is fueling a payment focused transaction climate which means quoting accurate monthly payments is critical. Unfortunately, too many dealers are spending precious time rewinding deals that online calculators are supposed to expedite, and the impact on CSI and F&I sales penetration is palpable,” said MacInnis.
One astonishing stat in the survey that might help explain auto dealers’ tolerance for inaccurate payment quotes is that over half of dealers think a realistic monthly quote can be within $50 of the final contracted monthly payment – a monthly amount that, in today’s economic climate, is extremely meaningful and can contribute to loss of F&I penetration. “If a consumer thinks they can afford a vehicle because of the online quote, get their heart set on it, and then find out that the monthly payment is $40 to $50 more, they may still buy that vehicle, but the dealer can say goodbye to warranties and other F&I product sales,” said MacInnis.
Underscoring this point, 88% of dealers estimate that their F&I sales penetration would increase by 10% or more if consumers were quoted qualified payment terms matched to lender fundable contract terms, with dealer mark-ups, before getting to the F&I office.
“Any increase in F&I sales is significant, and a 10% or greater increase can add up to significant profits. The message is clear,” continued MacInnis. “For digital retailing to evolve into profitable modern retailing, dealers need to eliminate the friction of inaccurate payment information and adopt digital pre-desking tools that can instantly match customer and dealer to a waterfall of qualifying lender programs prior to the first pencil or F&I handoff.”
Key Survey Takeaways
About eLEND Solutions
eLEND Solutions™ (DealerCentric rebranded) is an automotive FinTech company focused on deal generation solutions that power transactional digital buying experiences for the retail automotive industry. The platform specializes in digital credit, identity, and finance solutions for remote and in-store shoppers, designed to accelerate conversions of digital end-to-end purchase experiences concluding with fundable, transactable deal structures.
For more information, please visit www.elendsolutions.com.
Contact Media Relations:
Angela Jacobson, mWEBB Communications, (714) 454-8776, angela(at)mwebbcom(dot)com
Crystal Hartwell, mWEBB Communications, (714) 987-1016, crystal(at)mwebbcom(dot)com